Financial Geekery


RSS Feed

Recent Posts



personal finance secrets: have a plan

Earlier today, I was talking with a colleague of mine about saving for college. Our children are still very young — my older child is five, and his is two — but we both know that college will be here in the blink of an eye, and if costs continue rising as they are, we have no time to lose.

Of course, that’s the catch, isn’t it? “If costs continue rising as they are.” Does anyone really think that college education’s current 7-8% rate of inflation is sustainable? Surely, something has to give soon, right?

Well, maybe. Probably. But maybe not. What, then, do we do? Sit back and hope that things have changed by the time our children are college-bound? Hardly. I’ve seen what happens when a cavalier attitude is taken towards college finances — bright kids go to a prestigious, expensive university, only to discover that the work they’re passionate about can’t support the student loans they’ve had to take. And so begins the debt spiral.

So we can’t do nothing. But we can’t create a plan that relies on things staying as they are, either; setting up an auto-withdrawal into a 529 plan and then ignoring it for the next couple decades is, while marginally better than doing nothing, still sub-optimal. The middle ground is this: make a plan that has some assumptions and some flexibility, and make course corrections as time goes by. It’s fairly certain that you’re going to have a wide margin of error at the beginning, but that’s OK — at least you’re travelling in the right direction. As your target date approaches, and as your information becomes more accurate, you can adjust your plan accordingly.

I know what you’re thinking, being the smart person you are: “Hmm…this probably applies to more than just college, doesn’t it?” That’s very insightful of you!

This concept applies to just about any long-term financial goal; retirement is another great example. You can create a super-complex formula for determining how much you need to save, but change just one or two variables — how much social security you get, how the tax code changes between now and then, how much you average returns are — heck, even whether the bulk of your high-return years are now or close to retirement — and you’ll get completely different answers. All you can do is make some assumptions, use those assumptions to make a plan, execute on that plan, and revisit and re-evaluate periodically. Again, your initial plan will almost certainly be very, very wrong, but that doesn’t make it worthless! Rather, it gives you a decent starting point, which will gradually become closer and closer to reality as time goes by and you make the necessary course corrections.

Sure, it takes some work — but it beats waiting until the last minute.

5-Minute Financial Scorecard

Whether you’re intentional about it or not, you’re using a set of financial strategies. How much benefit are you reaping from them -- and how much more could they be making? Answer a few questions and find out how optimized your financial strategies are!

Your data is completely private. We’ll only use your e-mail to keep you up to date!


The information on this site is provided “AS IS” and without warranties of any kind either express or implied. To the fullest extent permissible pursuant to applicable laws, Seaborn Financial, LLC (referred to as "Seaborn") disclaims all warranties, express or implied, including, but not limited to, implied warranties of merchantability, non-infringement and suitability for a particular purpose. Seaborn does not warrant that the information will be free from error. None of the information provided on this website is intended as investment, tax, accounting or legal advice,  as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk. Under no circumstances shall Seaborn be liable for any direct, indirect, special or consequential damages that result from the use of, or the inability to use, the materials in this site, even if Seaborn or a Seaborn-authorized representative has been advised of the possibility of such damages. In no event shall Seaborn Financial, LLC have any liability to you for damages, losses and causes of action for accessing this site. Information on this website should not be considered a solicitation to buy, an offer to sell, or a recommendation of any security in any jurisdiction where such offer, solicitation, or recommendation would be unlawful or unauthorized.



6617 Oasis Drive, Austin, TX 78749


Follow us on